How Blockchain is transforming traditional Asset Management

Blockchain technology has unparalleled potential to improve the efficiency and governance of asset management in real estate. Currently, a lot of processes involved in real estate transactions still require manual labor, are accessed offline, or are ultimately inaccessible to a large majority of parties to a transaction. The process is also inefficient, cumbersome, and introduces unnecessary delays. The asset management sector can certainly benefit from the performance increase provided by blockchain technology.

What is Blockchain Asset Management?

Blockchain Asset Management delivers flexible infrastructure for regulated financial institutions to share processes and data securely, on a need-to-know basis, without the need for manual reconciliation. It combines a permission with powerful financial modelling language to ensure that each institution operates from a single source of truth.

Existing problems

Currently, Investors buy funds from their Asset Manager, Advisor or Broker, where orders are executed individually, involving significant communication with distributors, registrars, transfer agents, much of which is conducted offline.

How can blockchain technology assist with Asset Management?

Blockchain based ledgers provide an alternative to centralised digital asset management. Blockchain technology allows decoupling of the basic tasks performed by centralised, e-money processors. These tasks include:

• Asset issuance: In the most general case, this could be performed by any user of the blockchain network
• Securing a users’ funds: This could be performed by third parties using custodial or non-custodial wallets
• Identities of services (and optionally customers): This could be performed by any user of the blockchain network
• Transaction processing: This could be performed in a decentralised manner by geographically distributed nodes of the network.

Blockchain technology can effectively process transactions in a much faster timeframe than traditional asset management transactions. Moreover, it does so at a much lower cost compared to current traditional solutions.

Transforming Asset Management Solutions

Blockchain will change the way commercial real estate assets are traded and managed while positively impacting the structure of regional property markets.

There are currently a small number of blockchain-based platforms that are supporting the sharing economy and improving the processes of housing lenders, simplifying the process of attaining, securing, and redistributing security deposits in real estate. The sharing economy is desperate for better technology to enhance the movements functionality. Asset management utilising blockchain technology will be able to improve the traditional methods. A structure offering better alignment between the buyer and seller, improved ability to maximize assets values, and enhanced liquidity allowing investors the ability to control how long they participate in the growth of underlying real estate portfolios.